LinkedIn: The only social stock that mattersJuly 30, 2012: 12:42 PM ET
When LinkedIn, aka the social networking site that actually has a diverse revenue stream, reports its latest earnings on Thursday, investors are clearly hoping that the company's hot streak will continue. Check out how well LinkedIn has fared compared to its rivals in the Global X Social Media Index ETF (SOCL).
But can LinkedIn avoid the earnings curse that has befallen Facebook, Zynga (ZNGA), Groupon (GRPN) and other recent social IPOs? What's more, even if Facebook has a strong quarter, can it possibly be strong enough?
Analysts are predicting a year-over-year revenue increase of nearly 80% -- compared to a more pedestrian top-line growth rate of 32% for Facebook. Wall Street is also forecasting a whopping 60 percent surge in earnings per share. But should LinkedIn change its name to PricedIn? The stock is valued at a stunning 150 times 2012 earnings estimates.
Amazingly enough though, several StockTwits users are not willing to jump off the LinkedIn bandwagon just yet.
That may be asking for a lot. $130 would not only eclipse the all-time intraday high Facebook set on its first day of trading in May 2011, it would also be nearly 30% above current levels. Earnings would have to be phenomenally better than forecasts ... and so would guidance. One StockTwits user sarcastically noted though that it's tough to fight momentum.
Ha! Thank you, Mr. Blodget. Anyway, Amazon (AMZN) only has to go up another 325% or so to get to quadruple digits. So sometime in mid-2013 perhaps?
Kidding aside, LinkedIn does probably deserve some sort of premium. (So does Amazon for that matter.)
The beauty of LinkedIn is that it generates revenue from fees as well as ads. And people that use LinkedIn most effectively are often doing so because they are trying to find the best candidates for jobs or for other networking opportunities.
In other words, LinkedIn isn't the leisurely time suck that Facebook can be. Maybe Zynga should launch Resumes With Friends?